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♪ that's what ameriprise financial does. that's what they can do with you. let's get to work. ameriprise financial. more within reach. i'm carol costello. thank you so much for joining me today. "cnn newsroom" continues right now with ashleigh banfield. >> thank you very much, carol. hello, everyone. good to have you with us. i'm ashleigh banfield. the vatican fighting off rumors of unholy scandals behind the pope's resignation as a cardinal quits under a cloud. cannibalism in the courtroom. an officer, a police officer, accused of plotting to cook and eat women, and he goes on trial today. and a mega trial over millions of gallons of oil spilled in the gulf. it could mean billions and

billions more in fines for bp. so leave it to $85 billion in spending cuts to remind people just how much the federal government matters. moments from now, president obama and vice president biden are due to meet with the nation's governors who do not need reminding that they're able to meet their payrolls, employ their citizens and their citizens largely because of washington's host. for the rest of us, the white house is pointing out how spending cuts in almost every federal program and department are going to affect each state. let's go to a couple of them. for instance, north dakota, it stands to lose funding for ten of its public schools. and 200 kids will be cut from head start. 2,000 civilian defense employees will face furlough. in ohio, that state stands to lose 350 teachers and cut 2,500 preschoolers from head start.

26,000 defense furloughs are expected there as well. to california now. 320 schools are going to lose funding. 64,000 defense furloughs. almost 16,000 fewer children will be vaccinated in that state. pretty tough to see those numbers. in fact, i want to bring in my cnn colleague, wolf blitzer in washington and ali velshi here in new york as well. ali, let me start with you. the numbers seem to be staggering when you look at them state by state. overall when you hear $85 million to hit on friday, people across the country might say, that's a good start. but it's not -- it doesn't stop there. there's a lot more to it than that. >> well, first of all, that's correct, it doesn't stop there. over the course of the next seven months, you'll see a lot of cutbacks. you know, there are two schools of thought on this, ashleigh. there are some who think it's really legitimate that there are finally cuts coming and that washington does nothing without its back to a corner. so why don't we go with these

cuts? because you'll never get them agreed to through negotiation. the problem -- the problem -- we have to remind of this. there are a lot of people saying democrats are fearmongering. the problem here is the hand-fisted, unfocused nature of these cuts. these are sledgehammers where you really need stilettos. the government is not as fat as people think it is, and you're going to learn this if the sequester goes through, if these forced budget cuts go through. you're going to learn over the course of the next month or so how you actually use the government. the issue here is that it will furlough federal employees. it will have cuts that you just described. a number of the governors, as you said, are meeting with the president, trying to make their case that this is really going to hurt us. the transfer payments to the states are going to be hurt. and it's not done in a way that people can say, here, this is what we should really cut. this we don't want cut. it's going to be 13% to defense, 9% coming out of most other what you call discretionary items. and it's not going to have that much of a cut to nondiscretionary things. there will be some cuts to

medicare, not social security. and that's where the cuts really need to be made. and that's what nobody wants to do, ashleigh, because nobody wants to politically be behind the idea that we're cutting medicare or social security benefits. >> ali, as much as people love to bash the government, the closing down of government is a real possibility. >> right. >> in the next month. we've got this whole continuing resolution deadline that's looming. >> yeah. >> give us the background. it's very complex because there are a lot of financial issues for people to wrap their heads around. give us the mae and potatoes on that. >> the president's supposed to put together a budget proposal in february, by april 15th, congress is supposed to vote on it, goes into effect october. that's with when the government's years start. we haven't done that since 2009. we have what's called a continuing resolution. congress agrees to fund everything at exactly the same level. that's what we've done for years. that continuing resolution, the budget for the government, ends to march 27th. on march 28th, if there isn't another continuing resolution, because there certainly won't be a new budget. we don't have enough time for

that. the government could shut down. there are little shutdowns that last a day or so. there are some, like 1995 and 1996, which go on for a long time. that's very damaging. so even the republicans who say that they are interested in the forced budget cuts going into place, many of them are not interested in a government shutdown. people hate those. >> well, and they're very expensive, you're right. ali velshi, thanks for that. wolf blitzer's going to weigh in on the political implications of all of this. and meanwhile, ali, the government continues. as i just mentioned as well, the president and the vice president are going to be speaking this hour to the nation's governors on the upcoming federal spending cuts. we're going to take their speeches live when they happen. but right now the first lady who had a late night last night presenting the best picture at the oscars, she's now speaking. and she has been speaking about military families. let's listen for a bit. >> -- we'll be improving our health care system. we're going to be boosting economic growth in this country through these efforts.

and most importantly, we're going to be strengthening our country not just for now but for the years ahead. and in the end, that's really what joining forces is all about. it's not just about supporting our heroes while they're on the battlefield. it's about standing with them in these times, standing with them and their families when they come home. when they come home, it's a forever commitment because we know that they don't stop serving this country when their military service ends. that is the beauty of our service members. they keep on going. we know that they are the next generation of leaders. all over the place in our businesses, in our hospitals, in our schools. they are the key resources that will put this country on the track and keep it on the track of greatness. so we don't just owe it to them to get issues like this right. we owe it to our communities, and we owe it to our country. that's how we will continue to grow our economy. >> so as we continue to listen

in, by the way, the first lady was not only dressed up nicely to give out the best picture for the oscars, but this event she's speaking to right now, the governors association, they had a black tie dinner last night with the first lady and the president as well. they've been meeting since friday. and this meeting ends today but not before the president has a chance to address all of the governors and of course this looming sequester is the big issue today, and more than likely the president is going to use his chance with the governors to push them to try to pressure them to get their legislators to back a new debt deal. there is a lot more to come. we're going to dip back into that as soon as the president begins to speak. here's our other big story, sex, blackmail and abuse of power. not usually what you like to think of when it comes to the church. coming up, how the vatican is dealing with a brand-new basket. allegations and resignations as well. all while preparing to pick a brand-new leader, coming up next. [ ding ] oh, that's helpful!

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if benedict the xvi was hoping for a quiet end to a sometimes turbulent papacy, it is obviously not to be. just four days before the pope's own resignation takes effect, we learned the only catholic cardinal in britain, keith o'brien, seen here, keith o'brien of scotland, has also resigned and won't be taking part in the conclave to choose pope benedict's successor. a british newspaper is saying that three priests and one former priest have accused

o'brien of, quote, inappropriate relationships dating back to the 1980s. he denies that, and he was due to step down anyway because of his age. but he was also expected to gather in rome this week, or next, with his fellow cardinals. and if anybody thought the church's scandals would end when a new pope was chosen, that is not to be either. the pope today decided that a top-secret vatican report on the document leak, remember that document leak that was blamed on the pope's butler? well, it's a report that he and only he is supposed to have seen. but it is supposed to be left to his successor now and not shared with the rest of us. those leaks were sensational enough, but the holy seas investigation reportedly turned up even bigger and juicier revelations which led to bigger questions about the first papal resignation in 600 years. cnn's christiane amanpour joins me live from rome and from

miami, a catholic turned episcopal priest, tv host and author. christiane, i want to begin with you. first of all, the secret dossier. what do we actually know about this secret dossier, and how do we even know what's in it? >> reporter: well, ableigh, to be frank, we don't know. the only person who really does know is pope benedict who was briefed today by those three cardinals. the allegations, the suspicions are that it could possibly have been about the possibility of blackmail against certain gay priests here in the vatican or around the world. but as we say, we simply don't know. if we had expected some of that to be released today, as you mentioned, the pope made a decision that this would go to the next pope and then it would be up to him on how to deal with it. but that is just one of the big stories here. and just when we think things can't get any worse, this last week of the pope being in office, things keep getting worse, ashleigh. >> christiane, does this make any difference for those who are expected to gather for the conclave? will it meet sooner than

expected? will it meet later? will people not show up? will there be people named at very high levels? or is this all going to be speculation until the next pope is chosen? >> reporter: well, what we do know is that the pope, pope benedict today, made a decision to change the very deliberate rules of the choosing of the next pope and of when the conclave can start. but, again, he didn't say when. that apparently we're going to know right after he leaves, after february 28th, maybe as early as march 1st. that's this friday coming. then we'll know, perhaps, when they will decide to have the next conclave. but he has said that it can happen earlier than the prescribed 15 days. on the other hand, there's also these scandals swirling around various cardinals and archbishops who are meant to be coming here to take part in the election. you've mentioned also the cardinal of scotland, keith o'brien, who today had his resignation accepted by the pope, earlier than many people would have believed, but perhaps

because of these allegations that have been lodged against him by, as you say, four clergymen, allegations of sexual misconduct back in the '80s. now, he has said that he is not coming. he said he does not want the spotlight to be on him in rome but rather on the pope and his last days. so that's one issue. and then, of course, you've got the questions around the los angeles -- the now disgraced los angeles cardinal, mahoney. many, many people don't want him to come here. he, of course, has been accused and criticized because of years of cover-up of social misconduct in this swirling priest pedophile criminal case that swept the united states since 2002. he says he's coming. more and more people, particularly high-level people, are saying that he should not come, including president obama's outgoing vatican ambassador has said that, too, he should not come. >> i want to bring in the father on this. father, what are your thoughts in terms of the timing of what's happened with this british cardinal and, of course, what christiane just mentioned with

los angeles's disgraced cardinal? is there anything to the timing of this stepping down in scotland? >> well, i think the first thing is that as religious leaders of any church, we want to see more positive headlines, obviously, about the vatican. and it's horrible to see over and over again how the culture of secrecy doesn't allow the church to come clean on so many of these issues. i think it's wrong to say that cardinal archbishop of los angeles or the cardinal archbishop of boston are the ones chao covered up things. i think it's part of the institution to cover up things. and unfortunately, if you were going to tell me no one can go to the conclave who has participated in any type of cover-up, you would probably exclude every cardinal in the church. because unfortunately, that's the way the church has operated. >> and for those who hear these reports over and over again, these allegations, these cases, these settlements, does it matter at this point that we're getting these allegations at the highest levels, at the cardinal

level, or does this become white noise after a while? or does it have the opposite effect? will people start to really take note? will this have a lasting effect, a detrimental effect, on the catholic church? >> well, it's negative to hear that spiritual leaders are involved especially protecting criminal behavior. because what we see is almost everything has to do with sexuality. and maybe a lot of these issues would be dealt with differently by the public and even by the media if the church had a different attitude toward lum s human sexual it'd. you can't condemn homosexuality and homosexual persons and at the same time cover up activities of homosexual clergy. that's the problem that we have here. >> certainly you can't condemn homosexuality. you can condemn hypocrisy, without question. christiane, that leads me to this question. i'm not sure if it can be answered. how hard is it to report on the church? how hard is it to get information out of the vatican? how much do you think we just don't know and never will know?

>> reporter: well, as your guest just said, it is true, there is a culture of secrecy and a total lack of transparency. that is simply a fact and has been for now decades. i mean, decades. and it's really american journalists, "boston globe" who broke this story back in i think early 2000s, 2002, about this raging criminal acts that have been going on in the roman catholic church. these are not just sins. these are actual crimes. and this is what roman catholics, so many of them, are so upset about, that they have not been able to have a full transparency. yes, pope benedict xvi made some efforts to do so, but there are still many criticisms that this has not been sorted out as it should be and that for generations, this thing has been covered up. and what you have now is, you know, 2005, i was here when pope john paul ii died, and we had the conclave for pope benedict xvi election. now, at that time there was a

lot of criticism that cardinal bernard law was coming here to take part in that conclave. at that time the vatican said that it's up to -- it's his duty, and he should come. now they're changing their tone somewhat about these others who are embroiled in these scandals and saying, well, it's up to him. they don't want now, here in the vatican, to take responsibility for these cardinals coming here. they're saying no, it's up to him. and obviously many of them were hoping that they wouldn't come. >> christiane amanpour working for us at the vatican and father albert cutie, thank you both for your input. as we move along, here are two things you never want to hear in the same sentence, horse meat and ikea meatballs. it's happened and we'll explain after this break. card rewards are easy to remember with the bankamericard cash rewards credit card. earn 1% cash back everywhere, every time. [ both ] 2% back on groceries. [ all ] 3% on gas. no hoops to jump through. i earn more cash back on the things i buy the most. [ woman ] it's as easy as...

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this is the state room from the vice president is addressing the national governors association meeting. the topic likely on his agenda today, probably the same as the president's, and that's the looming sequester, the spending cuts. let's listen. >> i think the american people are ready to get up, as the civil rights leader when i was coming up as a kid, the american people are tired of being tired. i think they're ready to get up and move. you guys know that because it's happening in your states. you probably feel it in your fingertips more than most of us do here in washington. and as i said, i think they know peer better positioned than any other nation in the world to lead the world. and that's why i think they're

so frustrated by what they see and don't see happening here in washington. and i think their frustration is turning into a little bit of anger. i found an interesting dynamic without ruining any reputations and picking out any one of you. whether it was a democrat or republican governor i've been talking to, last night and over this past weekend, i heard from several of you, both parties, how do you deal with this going on up here? how do you deal with the congre congress? no distinction, drem or republican, depending on who i was talking to. how do you deal with this? because you guys and women deal with legislatures that are split. some of you represent a minority party as governors, yet you get on very well with you accomplish things in your home state. and as i said, i've been here long enough, that's the way it used to work.

and i think we can make it work that way again. there's a number of things we have to do immediately, and we may disagree on how to address them, but i don't think anybody disagrees on the need for them to be addressed from implementing the affordable care act. it's a law. you all are grappling with that. each of you are making different decisions, but you're moving and you're making your own judgments. we also have to -- i don't think there's much disagreement, there's a need for immigration reform. there's -- i've not met a governor from the time of implementing the recovery act to now who doesn't think that we have to do something about our crumbling infrastructure in order to impact on our productivity here in this country, continue to attract, keep and bring back american business from abroad. and there's very little disagreement on the need to build an education system that has such immense possibilities for our people. but on most of these issues, we're united by more than what

divides us. all these issues intersect at a place, the ones i just mentioned and others, they intersect at a place where both the state and federal governments engage. so we're going to have to work together. they overlap in many cases. we'll have our differences, but we all should agree that the united states has to, once again, have the highest percentage of college graduates of any nation in the world. i don't think there's any disagreement. everybody agrees, and some of you governors have led the way on early education and the consequences for the prospects of success for our children of not only of graduating but avoiding the criminal justice system. you've all led in knowing that we have to have reform of our high school system so that we not only find a pathway for people who are going to go to college but into the trades. so there's so much agreement

that i think we ought to be able to get a fair amount done. and we should all agree that to grow our economy, we have to invest in manufacturing, clean energy, infrastructure, education. the question is who invests and how much and how we're going to debate that. but there's not much disagreement about the need to invest. and i think we're all -- i've never met a democrat or republican who's been a governor who doesn't think that the american people should have the sense that hard work is going to be rewarded, that there's a chance that if you work hard, you've got an opportunity. you know, i don't know of any group of men or women that are a better living example of that than all of you sitting in front of me in your own experiences. you know, the question is, we all use the phrase "move forward in a balanced way." when one man's balance is another man's imbalance. but that's what we've got to talk about. that's what's at stake. but the one thing that i don't

think any of you lack is a vision about how great this country can be now that we're coming back, that we ought to be able to reassert ourselves in a way that we own the 21st century. and i know the guy i'm about to introduce believes that as strongly as all of you do. ladies and gentlemen, let me introduce you to the president that's back with the pastry chef. and i'm wondering what he's doing back there. the president of the united states, my friend, barack obama. >> thank you, everybody. thank you. please, please, have a seat. thank you, guys. please, have a seat. welcome, everybody. thanks for being here. we all have a lot on our plate. and everything from our immigration system to our education system. as joe talked about, our goal is

to make sure that we can be an effective partner with you. i want to thank the members of my cabinet who are here and members of the administration. i want to thank jack and mary for their leadership of the nga, and everybody else, i just want to say thanks for being on your best behavior last night. i'm told nothing was broken. no silverware is missing. i didn't get any calls from the neighbors about the noise. although i can't speak for joe's after-party at the observatory. i hear that was wild. now, i always enjoy this weekend when i have a chance to see the governors. as leaders, we share responsibility to do whatever we can to help grow our economy and create good middle-class jobs and open up new doors of opportunity for all of our people. that's our true north, our highest priority, and it's going to guide every decision that we make at every level.

as i've said, we should be asking ourselves three questions every single day. how do we make america a magnet for good jobs? how do we equip our people with the skills and training to get those jobs, and how do we make sure if they get those jobs that their hard work actually pays off? as governors, you're the ones who are on the ground. seeing firsthand every single day what works, what doesn't work. and that's what makes you so indispensable. whatever your party, you ran for office to do everything that you could to make our folks' lives better. and one thing i know unites all of us and all of you, democrats and republicans. and that is the last thing you want to see is washington get in the way of progress. unfortunately, in just four days, congress is poised to allow a series of arbitrary, automatic budget cuts to kick in that will slow our economy, eliminate good jobs, and leave a

lot of folks who are already pretty thinly stretched scrambling to figure out what to do. this morning you received a report outlining exactly how these cuts will harm middle-class families in your states. thousands of teachers and educators will be laid off. tens of thousands of parents will have to deal with finding child care for their children. hundreds of thousands of americans will lose access to primary care and preventive care like flu vaccinations and cancer screenings. tomorrow, for example, i'll be in the tidewater region of virginia where workers will sit idle when they should be repairing ships and a carrier sits idle when it should be deploying to the persian gulf. these impacts will not all be felt on day one, but rest assured, the uncertainty is already having an effect. companies are preparing layoff notices. families are preparing to cut

back on expenses. and the longer these cuts are in place, the bigger the impact will become. so while you are in town, i hope that you speak with your congressional delegation and remind them in no uncertain terms exactly what is at stake and exactly who is at risk. because here's the thing. these cuts do not have to happen. congress can turn them off any time with just a little bit of compromise. to do so, democrats like me need to acknowledge that we're going to have to make modest reforms in medicare if we want the program this for future generations and if we hope to maintain our ability to invest in critical things like education, research and infrastructure. i've made that commitment. it's reflected in proposals i made last career and tyear and before that and will be reflected in my budget, and i stand by those commitments to make the reforms for smart

spending cuts. but we also need republicans to adopt the same approach to tax reform that speaker boehner championed just two months ago. under our concept of tax reform, nobody's rates would go up, but we'd be able to reduce the deficit by making some tough, smart spending cuts and getting rid of wasteful tax loopholes that benefit the well-off and the well connected. i know that sometimes folks in congress think that compromise is a bad word. and they figure they'll pay a higher price at the polls for working with the other side than they will for standing pat or engaging in obstructionism. but as governors, some of you with legislatures controlled by the other party, you know that compromise is essential to getting things done. so and so prioritizing. making smart choices. that's how governor o'malley in

maryland put his state on track to all but eliminate his deficit while keeping tuition down and making maryland's public schools among the best in america five years running. that's how governor haslett balanced his budget last year in tennessee while still investing in key areas like education for tennessee's kids. like the rest of us, they know we can't just cut our way to prosperity. cutting alone is not an economic policy. we've got to make the tough, smart choices to cut what we don't need so that we can invest in the things that we do need. let me highlight two examples of what we do need. the first is infrastructure. this didn't used to be a partisan issue. i don't know when exactly that happened. it should be a no-brainer. businesses are not going to set up shop in places where roads and bridges and ports and schools are falling apart. they're going to open their doors wherever they can connect

the best transportation and communications networks to their businesses and to their customers. and that's why i proposed what we're calling fix it first. i talked about this in my state of the union address. to put people to work right now on urgent repairs like the nearly 70,000 structurally deficient bridges across the country and to make sure taxpayers don't shoulder the entire burden, i also proposed a partnership to rebuild america that attracts private capital to upgrade what our businesses need most. modern ports to move our goods, modern pipelines to withstand a storm, modern schools that are worthy of our children. i know that some people in congress reflectively oppose any idea that i put forward, even if it's an idea that they once supported, but rebuilding infrastructure is not my idea. it's everybody's idea. it's what built this country.

governor kitzhaber, a democrat, in oregon has made clean energy infrastructure a top priority. governor brownback. kansas, a republican, has been fighting to upgrade water infrastructure there. and folks who think spending really is our biggest problem should be more concerned than anybody about improving our infrastructure right now. we're talking about deferred maintenance here. we know we're going to have to spend the money. and longer we wait, the more it's going to cost. that is a fact. i think matt mead, republican, put it pretty well in wyoming's state address. he said failing to maintain our roads is not a plan for being fiscally conservative. well, it's true in wyoming, it's true all across the united states. and we could be putting folks back to work right now. we know contractors are begging for work. they'll come in on time under budget, which never happens. and we could make a whole lot of progress right now on things that we know we're going to have

to do at some point. it's like fixing the roof or replacing a boiler that's broken. it will save us money in the long term. i know that one of the biggest hurdles that you face when it comes to fixing infrastructure is red tape. and oftentimes that comes out of washington with regulations. in my first term, we started to take some steps to address that. and we've shaved months, in some cases even years, off the time line of infrastructure projects across america. so today i'm accelerating that effort. we're setting up regional teams that will focus on some of the unique needs each of you has in various parts of the country. we're going to help the pacific northwest move faster on renewable energy projects. we're going to help the northeast corridor move faster on high-speed rail service. we're going to help the midwest and other states like colorado move faster on projects that help farmers deal with worsening drought. we're going to help states like north dakota and south dakota, montana move faster on oil and gas production.

all of these projects will get more americans back to work faster. and we can do even more if we can get congress to act. the second priority that i want to talk about is education. and in particular, education that starts at the earliest age. i want to partner with each of you to make high-quality preschool available to every child in america. this is an area where we've already seen great bipartisan work at the state level. i was just in governor deal's state to highlight this issue because georgia has made it a priority to educate our youngest kids. and in the school district where i visited in decatur, georgia, you're already seeing closing of the achievement gap, kids who are poor are leveling up, and everybody is seeing real improvement because it's high-quality, early childhood education. study after study shows that the sooner children begin to learn

in these high-quality settings, the better he or she does down the road. and we all end up saving money. unfortunately today, fewer than three in ten 4-year-olds are enrolled in a high-quality preschool program. most middle-class parents can't afford a few hundred bucks a week in additional income for these kinds of preschool programs. and poor kids who need it most lack access. and that lack of access can shadow them for the rest of their lives. we all pay a price for that. every dollar we invest in early chi childhood education can save more than $7 later on, boosting graduation rates, reducing teen pregnancy, even reducing incidence of violent crime. and again, i'm not the first person to focus on this. governor bentley has made this a priority in alabama. governor schneider is making it a priority in michigan. governor tomlin has made this a priority in west virginia. even in a time of tight budgets,

republicans and democrats are focused on high-quality early childhood education. we want to make sure that we can be an effective partner in that process. we should be able to do that for every child everywhere, democrat, republican, blue state, red state, it shouldn't matter. all of us want our kids to grow up more likely to read andrite and do math at grade level, to graduate high school, hold a job, and form more stable families of their own. that will be better for every state. that will be better for this country. that's what high-quality early childhood education can deliver. and i hope that you're willing to partner with us to make that happen. let me just close with this. there are always going to be areas where we have some genuine disagreement. here in washington and in your respective states. but there are more areas where we can do a lot more cooperating

than i think we've seen over the last several years. to do that, though, this town has to get past its obsession with focusing on the next election instead of the next generation. all of us are elected officials. all of us are concerned about our politics, both in our own parties as well as the other parties. but at some point we've got to do some governing. and certainly what we can't do is keep careening from manufactured crisis to manufactured crisis. as i said in the state of the union, the american people have worked hard and long to dig themselves out of one crisis. they don't need us creating another one. and unfortunately, that's what we've been seeing too much out there. the american people are out there every single day meeting their responsibilities, giving it their all to provide for their families and their communities. a lot of you are doing the same things in your respective states. we need that same kind of attitude here in washington.

at the very least, the american people have a right to expect that from their representatives. and to i look forward to working with all of you. not just to strengthen our economy for the short term but also to re-ignite what has always been the central premise of america's economic engine. and that is that we build a strong, growing, thriving middle class where if you work hard in this country no matter who you are, what you look like, you can make it. you can succeed. that's our goal, and i know that's the goal of all of you as well. so i look forward to our partnering. and with that, what i want to do is clear out the press so we can take some questions. all right? thank you. >> well, we never like to hear "clear out the press." we want to hear those questions, and more interestingly, the answers. but that's the way it goes when it's the national governors association meeting with the president. the president just wrapping up his remarks to that group that's been meeting since friday in

washington, d.c. also in d.c., our wolf blitzer who's joining me for a little bit of his take on what all this means. wolf, i want to repeat one line that stood out for me most, and that was this. "while you're in town, i hope you will with your congressional delegation and remind them of what's at stake," obviously referring to the looming sequester and those cuts that are set to take place, if a budget deal can't be reached. that was the whole point of this set of remarks, wasn't it, to pressure these governors to push their republican leaders to get a deal his way. >> but the whole issue right now, ashleigh, as you know, is coming down to increasing taxes, tax revenue, as the president is firmly demanding. unless he blinks on that, i don't see the republicans once again going ahead and raising taxes. they're not going to raise tax rates, but they're not going to eliminate these loopholes that the president is talking about, exemptions for the wealthy or corporations. as part of a grand bargain that

would also include entitlement reform, reforming social security, medicare and medicaid. as part of that kind of deal, then you can have tax reform which would eliminate some of these loopholes and some of these exemptions and restructure the tax code, if you will. i don't think that's going to happen in the next four days by any means. so unless the president walks away from increasing tax revenue or the republicans for some reason, i don't think they will, will say, you know what? we raised taxes in december as part of avoiding the fiscal cliff. we're going to do it again now. i don't think they will. this is going to -- the country's going to go into what they call forced spending cuts or sequestration. there is one out that a lot of people in washington now are talking about, and that is giving the executive branch of the government, the president specifically, flexibility, passing legislation either now or maybe as part of a continuing resolution to keep the government going by the end of march, which will say, you know what? you don't have to do these across-the-board meat cleaver kind of cuts.

we're going to let you cut in a more artful, more specific way so that tsa security officers, meat inspectors or head start programs aren't going to be cut, but you can cut -- go after some of those truly wasteful spending cuts. and that would bring up to $85 billion. so if they give the administration that kind of leeway, the question would be, ashleigh, will the president sign that into law? will he reverse himself and go ahead and walk away from those increased tax revenues? that's what we'll see over the next four days. >> and that would not be at all anything like this careening from crisis to crisis, which i heard dana bash bring up and i heard the president quote the careening from one deadline to another and kicking the can. that executive option is completely different. >> right. it would give the president and the executive branch, whether defense spending or domestic spending, much greater freedom to go ahead and not just do that across-the-board meat-cutting kind of -- >> like a scalpel. >> yeah. just do it with a much more

precise way so it's not as painful. we're talking about, what, 2.5% out of the nearly $4 trillion budget. $85 billion. but when you eliminate social security and medicare, when you eliminate interest that has to be paid, you know, that's a big chunk of the federal spending right there. so it could be 6%, 7% of what's called domestic discretionary spending. that's a lot of money. but they could do it in a more artful way if they have the desire. >> you would have thought that congress would have done that in the more artful way up until this point. but let me ask you about this address to the governors. do the governors have any sway over their members, that obviously the president is urging them to speak positive while they're thisin washington is this just an opportunity for the president to address the cameras and do what republicans say which is just a whole bunch of campaigning to try to get people on his side as opposed to kromizing or negotiating? >> the governors have influence on their congressional delegations, certainly on their

senators. there's no doubt that there's going to be pain in all of these states, and that's why the white house this morning released this long study, how much pain there's going to be in each state, how many jobs are going to be lost, which jobs are going to be lost, which schools are going to be eliminated, and all these kinds of painful cuts. the president is trying to keep the pressure on these members of congress. i'm still not ruling out the possibility, based on my years here in washington, of the president and john boehner and mitch mcconnell and nancy pelosi, harry reid, getting together, sitting down this week, recognizing that this sequestration or these forced budget cuts, that's the worst way of cutting spending, coming up with some alternative. you know, it's remote. it's not necessarily, you know, likely, but it's still doable if there's some good will on both sides. >> well, we'll see. we'll see what the republicans have to say of john boehner and the house gop leaders have scheduled a news press for 4:00 p.m. today. wolf, you'll have a lot live on your program later today.

thanks for being with me. that story continues. and then also, a horrific crash at daytona sent dozens of fans to the hospital. you probably saw the pictures, but do those injured fans have a case against the speedway or anybody else for what happened to them? we're going tosk our legal experts next. working behind the scenes to provide companies with services... like helping hr departments manage benefits and pensions for over 11 million employees. reducing document costs by up to 30%... and processing $421 billion dollars in accounts payables each year. helping thousands of companies simplify how work gets done. how's that for an encore? with xerox, you're ready for real business. [ male announcer ] when we built the cadillac ats from the ground up to be the world's best sport sedan... ♪ ...people noticed. ♪

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top stories now. remember those tasty swedish meatballs at ikea? now they're pulling them from shelves in 14 european countries over fears they may contain horse meat. a test done in the czech republic found horse meat was in the beef. ikea says their own tests showed no horse in those meatballs. test results are expected in just a few days. just a reminder, there is no horse meat in the united states. congratulations to jimmie johnson who won the daytona 500. it was a weekend that was however marred by a pretty bad

crash, a wreck that sent debris flying into the stands as high as 75 feet. 28 people were hurt by all of this. none of the drivers hurt, just the fans. so what about those fans? i want to bring in our legal panel now, because whenever you hear about fans getting hurt, you think about fans suing. sunny hostin, our legal analyst as well as darren, trial lawyer and host of the program "deadly sins" on the investigation discovery network. hello to both of you. >> hello. >> let me start with what's written on the back of the ticket because nobody ever reads what's on the back of the ticket, but they should. let me go. "the holder of this ticket expressly assumes all risk incident to the event and agrees that all participants, sanctioning bodies and all employees, agents officers and directors of daytona international speedway, its affiliates and subsidiaries are hereby released from any and all claims arising from the event, including claims of negligence." you don't have to be a lawyer to

know that that sounds pretty darn a lawyer to understand that sounds pretty darn complete. is it good enough to keep the track and the drivers and the manufacturers of the cars and all those parts absolutely immune from any kind of legal case? >> yeah, i actually really think it is enough. it's sort of the opening statement of the defense team, if a case comes forward in this regard. i mean, bottom line is, when you go to a baseball game, you may be hit with a baseball going into the stands. you kind of assume the risk when you sit in a stadium that something that could happen during a sporting event, could happen. and so i think you assume the risk when you're sitting there. they've got a crash fence up that appears to have done somewhat of a job. i see darren shaking his head as -- >> darren, makes me think thaw have a reasonable expectation of safety. don't you? >> yeah, well, reasonable minds

can differ about this. it actually is, as sunny points out, two legal distinctions going on. first the boilerplate legal blah blah or what lawyers call contract of adhesion. to can often be -- they're often enforced but they can be set aside if it's found that there's unequal bargaining power or they're fundamentally unfair or lack what we lawyers call consideration, which is some bargaining that happens. obviously, when you pull into a parking lot or go to your dry cleaners or go to a sporting event, you don't have the ability to bargain for those terms. but what sunny points out i think will ultimately carry the day is the assumption of the risk, when you make voluntary contact with a known risk like, i don't know, if i step into a boxing ring with mike tyson, i can't complain when he beats me up. >> bunks me in the noggin or -- >> or a fly ball hits you in the

face. >> what kind of risks are people assuming when they go to a sporting event? i don't know that it's flying auto parts. and i think that's what lawyers -- >> let's leave that case there because i have another case i want you both to weigh in as well. this is great. this is one where a guy says he was just role playing online, fantasizing online but federal authorities are saying that the man known as giplanning to cook young women in new york city. it's gross, start to finish. opening statements start in a couple of hours. this guy is a former new york city police officer. he's plead not guilty. sunny, start here, he's going off online on all these crazy fantasies about rape and cannibalism but he didn't do it, so where does it become illegal if you're fantasizing? sdwloou >> you know, it's a difficult case. it's a federal case. a type of case i would have

handled when i was a federal prosecutor. but i have to tell you, i think they have an uphill battle. there are so many fetish sites out there, there are so many people that have these really weird sexual proclivities but they don't go any further. and there's a lot 6 of research that's been put into it to show they don't typically go further. he's also been charged with using the police -- law enforcement database to get addresses for women. i think that's probably a slam dunk for the prosecution. >> darren, he's not only been charged with that -- >> the kidnapping piece makes me uncomfortable. >> he compiled an online dossier, discussed targeting, he met a woman for brunch, improperly used the database, searched online for chloroform. is that conspiracy? >> those are steps for fantasy. the police motto of protect and serve has somehow become a cookbook. >> ew!

>> crazy. >> but the problem that he has, all joking aside, forgive me, the problem that he has, and i faced this in representing law enforcement officers, is that generally when you're on the side of law enforcement, you want to be able to get up and talk about your client being a law-abiding bastion of responsibility. the idea of this kind of fantasy suggests more of a double life than his lawyer would like to see. this will ultimately be a tough one. you lose it in the court of public opinion, i believe. >> i wish we could speak more about then then i wish we couldn't. gross. thanks. back right after this. news flash:

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